Money Damages-Only Lease Clause Isn’t ‘Unconscionable’

What Happened: A lease contained the following provision: “None of Landlord’s obligations under this lease shall be subject to specific performance or injunctive remedies, and Tenant waives all rights with respect to such remedies.”

This clause basically means that if a tenant thinks the landlord violated the lease, it can only sue for money damages and can’t ask a court to force or block the landlord from taking a specific action. But is the provision enforceable?

A restaurant tenant claimed that the clause was “unconscionable” and asked the court to step in and bar the landlord from locking him out after he gave notice to renew. But the court refused.

Decision: The Arizona appeals court upheld the ruling that the clause was enforceable.

Reasoning: Unconscionability occurs when one party to a negotiation takes total advantage of the other to impose unfair and one-sided terms. But the court said the landlord didn’t do that. Although he barely spoke English, the tenant’s English was proficient enough to negotiate the lease in that language, with not only the current but previous landlord. The waiver clause was also clear, straight forward, and easy to understand.

But while the tenant didn’t get the injunction, the court said he could still sue for money damages, citing evidence that the landlord acted in bad faith when it deliberately ignored his renewal notice for six months.

• Chef Tian LLC v. 668 N. LLLC: 2020 Ariz. App. Unpub. LEXIS 623